The Five Dumbest Things on Wall Street This Week

1. Hot in the CTI

It was a quiet week at the research lab this week. Mostly we hung around the lunchroom, watched CNBC on TV and sat shiva for the Nasdaq.

Despite our grief, we did manage to squeeze some groundbreaking research into the abbreviated workweek. Like our close look at medical services and supply company CTI Molecular Imaging (CTMI Quote), which went public last month.

According to Reuters, CTI Molecular Imaging changed its name from plain ol' CTI "to help eliminate any relation" to CIT Group (CIT Quote), recently spun off from Tyco International (TYC Quote), and to breast-cancer detection company Computerized Thermal Imaging (CIO Quote), which has accused its former CEO of making misrepresentations to the public about a Food and Drug Administration application.

Sounded interesting -- CTI not wanting to be confused with CIT or with the other CTI in the medical imaging business.

Except that's not what happened, says a CTI Molecular Imaging spokeswoman. The longer name, she says, helps the company clarify its mission. Plus, she says, the CTI name was already taken among Delaware corporations.

So where did this Reuters item come from? "They just assumed something and just went with it," says the spokeswoman. A Reuters spokeswoman says, "We stand behind our editorial content, and this information was confirmed by a source at CTI."

2. On Your Martha, Get Set, Go!

You know, we tried to get through the week without doing what every other news outlet in the world was doing: picking on Martha Stewart Living Omnimedia (MSO Quote) chief cook -- we assume someone else washes bottles -- Martha Stewart.

We failed.

For more historical insight on this weekend of American history, we turn to Wall Street scribe Ron Chernow, the man who chronicled the lives of J.P. Morgan, John D. Rockefeller Sr. and the Warburgs.

We have Martha Stewart and ousted WorldCom (WCOME Quote) chairman Bernie Ebbers having their names soiled in the press, we pointed out to Chernow. Any resemblance between these vilified names of today and the financial barons of the past?

Nope, says Chernow. "They really didn't care about their public image. And in a way, they didn't need to care about their public image, at least at first, because their companies were either privately owned or closely held," he says. "There wasn't the same need to answer to a very large universe of shareholders. Whereas clearly when we're talking about a Martha Stewart or a Bernie Ebbers, fortunes are not simply created by a successful business but much more so from the valuation that the stock market assigned to that business."

And as resented as the wealthy may have been in the past, the new crowd has it worse, suggests Chernow. "There is an anger among the general public that is much deeper today than a hundred years ago, because they're likely to be not simply consumers of the product but possibly shareholders in the company," he says. "I think the attention focused on these people is much more obsessive for that reason."

But wait, there's more. "I think that also in the age of mass media -- and Martha Stewart would be a perfect example of this -- that we feel that we know [business leaders]," says Chernow. "I've been struck the past few days, in New York, you look at the cover of the tabloids, and it just says, 'Martha.' I don't know that if someone had said 'John' a hundred years ago that people would have known it was Rockefeller."

3. Iran With This Crazy Idea

Speaking of historical precedents, we spent all week at the research lab trying to scratch this itch inspired by Jean-Marie Messier. See, as we watched Messier's drawn-out stuggle to appear to stay in control of Vivendi Universal (V Quote), we couldn't help thinking that he reminded us of someone else we knew. Except we couldn't remember who. Conceptual humorist Jerry Lewis? What about Akio Tanii, the Matsushita president who went after Universal in 1990?

Then it finally hit us: the Shah of Iran.

What a Messier We got Shahed again

Like Messier, who two years ago announced the seminal deal for Universal Studios and the Universal Music Group, the Shah of Iran in the late 1970s was a foreigner entranced by the U.S. Though firmly rooted elsewhere, he understood how the game was played in America, and he wanted to play it.

And just like Messier, we Americans were cheerfully oblivious to our best buddy's political situation back home. This guy loves us, we thought; his people will, too.

Well, as the Ayatollah Khomeini might have said in 1979, maybe not.

Yes, once again we learn that it's cool to have friends in high places. Until they get knocked off their perch.

4. Stock Excuses

Retailers can be creative when it comes to explaining why sales fall short of expectations. But even in this sea of innovation, consumer electronics chain Tweeter Home Entertainment (TWTR Quote) manages to stand out.

Forget the standard reasons companies give for poor performance -- stuff like how the weather was too hot, the weather was too cold, or El Nino was too strong. Forget the usual stuff about shifting tastes and cutthroat price wars. Tweeter has found a new scapegoat: the stock market.

Tweeter-dee, Tweeter-dum Blame it on the bear

No, not changing economic conditions. The stock market.

Here's Chief Financial Officer Joe McGuire's explanation of why, in the quarter ended June 30, same-store sales remained flat for the first two months but plummeted 13% in the third: "Our sales have frequently shown a high degree of correlation with major moves in the overall stock market," says McGuire in a statement, "and we believe this accounts for much of the top-line degradation in June."

Hmm. Wanting to get a handle on the overall stock market ourselves, we noted that the Standard & Poor's 500 indeed dropped 7.2% in June. So maybe there's something there.

Or maybe not. The S&P, after all, fell 6.1% in April, the first month of the quarter. So we're supposed to believe that a 6.1% drop causes no ill effects, but a 7.2% decline sends everything to pieces?

Maybe Tweeter should just have blamed some Y2K computer problem.

5. Hasta La Vista Continental

Every now and then, you read about a stock that ends up making WorldCom (WCOME Quote) look as solid as Berkshire Hathaway (BRKA Quote).

Like this week, when we did a little bit of research into a little-known mining company called Vista Continental.

What little we do know about Vista Continental starts with newspaper ads and a press release the company published June 13. In that release, the company announced that it had just been acquired by a bulletin-board-traded company called Century Laboratories (CYLI Quote).

And boy, did things look promising for Vista Continental and Century Labs. As the press release explained, a geology report on two of Vista's claims in a "certain region of South America" concluded that the property potentially contained $10.7 billion worth of rare earth metals and other cool stuff.

That press release set Century Labs' stock on fire June 13, more than quintupling its sub-dollar price to $3.25. A few days later, the stock hit $7.50.

Then the craziest thing happened. A full two weeks later, Vista Continental started issuing corrections to the press release -- including a corrective ad that ran in The Wall Street Journal on Tuesday.

It seems Vista Continental overstated the value of its claims on June 13. That $10.7 billion figure from the first press release didn't apply to two of its South American claims; it covered 12 claims, only two of which are owned by the company. The rest of the claims are owned by one Alberto DoCouto, who happens to be the controlling shareholder of Vista Continental and Century Labs. The Alberto DoCouto-controlled Century Labs is negotiating with Alberto DoCouto himself to purchase those and other claims owned by DoCouto. "However," notes the press release, "there are no guarantees that Vista will be successful in additional acquisitions."

Well, we can't wait to find out what kind of deal Mr. DoCouto may end up cutting with Mr. DoCouto.

If you ask us, the Dumbest part of the whole affair is the company's statement of contrition regarding its initial press release and newspaper advertisements. Vista Continental, the company says, apologizes for any "confusion" the statements may have caused.

Confusion. That's a nice word, but it's probably a euphemism for the experience of the poor souls who bought Century Labs stock on the basis of the June 13 press release. If we were among those people, it's doubtful we would be settling for an apology.

So why did it take two whole weeks for the company to correct its misleading $10.7 billion press release? We wish we knew. Unfortunately, Vista Continental's CEO, Dr. Lawrence Nash, wasn't immediately available for comment.